Categories: New York City
06.01.2023
There have been multiple media reports in recent weeks about nonprofit supportive housing providers engaging in legal proceedings to address record-high rent arrears among tenants. Rent arrears is pervasive and has reached crisis levels since the pandemic not just in our community, but also in affordable and public housing, impacting thousands of New Yorkers across the five boroughs.
Rental income is crucial for the maintenance and operations of supportive housing buildings and providers are obligated to rely on the tenant portion of the rent to pay for utilities, staff and security. This is not a choice made by providers, but an aspect of how the system is designed and buildings are funded to operate.
Collectively across the city, tenants are millions of dollars behind in their rent, creating significant financial difficulty for all building owners. The Network surveyed a small sample of its NYC members to find that several providers are in the six- to seven-digit figures in owed rent. Supportive housing providers, however, are in a unique position, as they work with on-site service coordinators over a long period of time to engage tenants to address the underlying causes of their unpaid rent with the goal of clearing arrears and giving tenants a fresh start.
Supportive housing tenants do have the opportunity of applying for a so-called “one-shot deal” from the city for financial assistance that enables them to clear their rent debt.
To be clear, a key fact that has been overlooked in multiple media reports is that only tenants themselves can apply for a one-shot deal.
If after extensive engagement efforts, for whatever reason, a tenant cannot, will not, or is unable to work with the nonprofit providers to apply for a one-shot deal, the building owner has, as a last resort, no choice but to begin legal proceedings.
That is, unfortunately, the process. It is one that our member providers collectively have said is their shared experience. It is, by far, not their preferred method of operating.
Media coverage has largely glossed over or given short shrift to the fact that these legal proceedings almost never result in eviction. One very large New York City provider has not had a single nonpayment eviction in three years; another has not had one in five.
The primary goal of beginning legal proceedings is to recoup arrears, ensuring the tenant clears their debt and the nonprofit can operate residences and provide necessary building maintenance.
The pandemic has had widely reported impacts on marginalized populations: overdoses, drug use, and mental health crises are all up substantially, and suicides are up 40-50%. The most vulnerable individuals are still deeply affected.
The nonprofits that own supportive housing buildings and the organizations that provide the services available in them are acutely aware of tenants’ struggles and challenges. They go the extra mile to try to engage with tenants to address whatever issues they are experiencing that get in the way of paying rent. The pandemic has been extremely hard on nonprofits as well: in addition to steeply increased need among tenants, the average staff shortage is 30% and chronically low wages have barely been increased.
Tenant rent accounts for some 40% of building owners’ maintenance and operations budgets. Tenant arrears in the millions of dollars are simply unsustainable.
The Network and our nearly 100 New York City nonprofit providers have long sought to find a better way for tenants to access one-shot deals. But to be clear, this is just one of a growing list of challenges facing our community at a time when supportive housing – a proven method of combatting chronic homelessness – is needed more than ever.
We stand ready to work with the city and other key stakeholders to find a better process to ensure tenants who owe back rent receive the financial support they need to stay housed. We must also address the many issues – from chronic underfunding to our under-compensated essential workforce – that threaten the long-term viability of the supportive housing community.